Question $1$

Finance Lease in the books of the lessor. The Machine was Bought for R$320000$ on $1$ Jan $2017,$ lease period is $5$ years, lease payments R$100000$ in arrears on $31$ December each year. Interest rate is $16\mathrm{.}9911\%.$

Calculate the interest income figure for the year ending $31$ December $2018.$

The answer is

A$.$ R$45622$

B$.$ R$14523$

C$.$ R$46618$

D$.54372$

Question $2$

YYZ LTD signed a $5$ year financial lease agreement on equipment. The minimum lease payments were R$100000$ per annum. With title to pass to YYZ LTD at the end of the lease term. The equipment has estimated useful life of $8$ years. The straight line method of depreciation is used. The minimum lease payments were determined to have a present value of R$654896$ an effective interest rate of $10\%.$

It should be recorded as$.$

The answer is

A$.$ Rent expenses or $100000$

B$.$ Interest expenses of R $65489\mathrm{.}6$ and depreciation of R$81862$

C$.$ Interest expenses of R $50000$ and depreciation of R$81862$

D$.$ Interest expenses of R$65490$ and depreciation of R$130979$

Question $3$

A lease record interest expenses in both finance and operating lease.

The answer is

True or False

Question $4$

A capitalised lease asset is depreciated over the term of then lease by the lessee.

The answer is

True or False

Question $5$

If a portion of the asset is not physically distinct and the lessee does not obtain all the economic benefits from the use of the asset, it is not an identified asset.

The answer is

True or False